U.S. stocks closed higher on Monday as oil shrunk further. However, Brent crude LCOc1 fell 25 cents a barrel to $37.67 on Tuesday after declining on the previous day to as low as $36.33, the weakest since December 2008. A drop below $36.20 would take it back to a point last seen in mid-2004.

Prices of oil have been falling due to oil surplus and the start of winter in the northern hemisphere.

The first rise in U.S. interests rates since 2006 is largely priced in, with the Fed projected to enhance its targeted rate to 0.25-0.5 percent from the existing zero to 0.25 percent.

“Though the Fed passes a hawkish message by recommending it aims to raise actively next year, they are data-reliant,” said Shin Kadota, chief FX strategist at Barclays in Tokyo.”Indicators must illustrate the U.S. economy can endure rate hikes before the dollar can launch into its next stage of appreciation.”

However, concerns over the rate rise could harm highly leveraged companies that have seen scattering funds in the high-yield debt market fail and impelled measures of risk sharply high in recent days.

They have also driven the yield premium of short-term Spanish and Italian bonds IT2YT=TWEBES2YT=TWEB over the German benchmarks DE2YT=TWEB to the highest since July.

Peter Chatwell, head of European rates strategy at Mizuho said, “At times, when liquidity is very thin like this due to the pending FOMC decision, the link between asset classes has a trend to climb significantly.”

“Hence, the weakness in the credit markets may also be a function of the FOMC,” he added.

The dollar index .DXY, which measures the currency in the U.S. against a number of its peers, fell 0.2 percent. The euro EUR= rose 0.4 percent to $1.1031, whereas the yen JPY= increased 0.2 percent to 120.83 per dollar.

“The dollar could encounter extra pressure if U.S. Treasuries are taken back on relief that the Fed’s cycle of the rate hike will be rather a slow one,” he said.

The Swedish crown rose against the dollar SEK= and euro EURSEK= after the Riksbank, the central bank of Sweden, kept interest rates unchanged as anticipated.

Gold XAU= dropped in anticipation of the higher U.S. interest rates. It last rested at $1,062.15 an ounce.